A recruiter who left Google last year says that the company had maintained a "do not touch" list of companies including Genentech and Yahoo, whose employees were not to be wooed to the Internet search giant.

That revelation could be significant in light of this week's disclosure that the U.S. Justice Department is investigating whether Google, Yahoo, Apple, Genentech and other tech companies conspired to keep others from stealing their top talent.

Although Google declined to comment on the list or other aspects of the investigation, Palo Alto attorney Gary Reback, who has been involved in a number of high-profile antitrust cases, said having such a list is not unheard of and not necessarily illegal. He noted that some companies might keep such a list to avoid upsetting a valued business partner that wouldn't want to lose its workers, for example.

However, if two or more companies agree to avoid poaching employees from the same list of companies, Reback added, that could constitute anti-competitive collusion under federal law.

Not the valley way

Some recruiters and others were surprised by the allegations, saying they conflicted with the valley's freewheeling and hotly competitive image.

"It doesn't fit," said Joe Maxwell of Santa Clara-based Silicon Talent, who like several other recruiters said he had never heard of any scheme by companies to keep their employees from going elsewhere.

I wonder if there ever was any economic proof of truly anti-competitive behavior, over a significant period of time, in the history of anti-trust. I know there’s been legal proof, but the law never had anything to do with (applicable) economic theory, only what was covered by the law, which in turn was what looked bad to people who didn’t know better.

Exactly so. Surely somebody would have produced an economic study were it possible. Certainly it would have been done at U Chicago or George Mason or one of the other schools with conservative or libertarian economists on staff. Alan Greenspan, according to several different websites (I haven't researched it any more deeply), said in his essay Antitrust:

"No one will ever know what new products, processes, machines, and cost-saving mergers failed to come into existence, killed by the Sherman Act before they were born. No one can ever compute the price that all of us have paid for that Act which, by inducing less effective use of capital, has kept our standard of living lower than would otherwise have been possible."

The Sherman Act was used in the 80s to attack IBM as the company became progressively less dominant in the mainframe computer business, an atrophying industry. The law was used later to attack Microsoft for such crimes as embedding application software such as a browser with its own operating system. Oracle and others cheered that suit on for their own advantage. Microsoft has been beaten handily in the marketplace in several sectors - shopping and social networking are but two of those. And now several companies are working on operating systems for the tiny "netbook" computers. Who knows what that will spawn?

* Google reserves the right to define the word "evil" and to re-define it at any time in the future, as many times as it chooses. No previous definition of the word shall be construed to be authoritative in any way on Google at any time.

6
posted on 06/05/2009 11:44:24 AM PDT
by TChris
(There is no freedom without the possiblity of failure.)

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